Central Bank Governor: Public Holds More Foreign Currency Reserves Than Central Bank
Encouraging people to bank their foreign exchange in local banks is one of the goals the Central Bank of Trinidad and Tobago is looking to implement in the near future.
This, from Central Bank Governor Larry Howai, who said it takes about US$6 billion annually to sustain the local foreign exchange market, but that figure does not meet the full demand for forex.
« We have to find ways to incentivise people to move the grey market into the normal market and, of course, the black market into the normal market. And those are initiatives that I’ve only started to consider over the last couple of months – how we start dealing with some of these things, in addition to the normal policy initiatives that we have to implement to deal with the situation that we face right now. »
He noted that annually the Central Bank provides about US$2 billion to the local banking sector to help meet the forex shortfall.
« When you take into account international flows, too. That is what people may have invested abroad as well as the deposits in the banking system. We believe that this number is higher than our number right now in that the public has more foreign currency reserves than the Central Bank itself. »
In addition to encouraging foreign exchange earners to bank their money in local banks, Mr. Howai offered another method to help meet the local demand for forex.
« The challenge for us is to determine how each one of us can become foreign exchange earners. The fact of the matter is that as our oil and gas goes down and becomes less and less, more and more we are each going to have to face the challenge of how do we meet the foreign exchange requirements of the country as a whole. »
The Central Bank Governor hosted members of the media and more than two hundred online participants at a press conference on Thursday.
